Correlation Between Shanghai Metersbonwe and Guangzhou Zhujiang
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By analyzing existing cross correlation between Shanghai Metersbonwe FashionAccessories and Guangzhou Zhujiang Brewery, you can compare the effects of market volatilities on Shanghai Metersbonwe and Guangzhou Zhujiang and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Shanghai Metersbonwe with a short position of Guangzhou Zhujiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Metersbonwe and Guangzhou Zhujiang.
Diversification Opportunities for Shanghai Metersbonwe and Guangzhou Zhujiang
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Guangzhou is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Metersbonwe FashionAc and Guangzhou Zhujiang Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Zhujiang and Shanghai Metersbonwe is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Shanghai Metersbonwe FashionAccessories are associated (or correlated) with Guangzhou Zhujiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Zhujiang has no effect on the direction of Shanghai Metersbonwe i.e., Shanghai Metersbonwe and Guangzhou Zhujiang go up and down completely randomly.
Pair Corralation between Shanghai Metersbonwe and Guangzhou Zhujiang
Assuming the 90 days trading horizon Shanghai Metersbonwe FashionAccessories is expected to generate 1.77 times more return on investment than Guangzhou Zhujiang. However, Shanghai Metersbonwe is 1.77 times more volatile than Guangzhou Zhujiang Brewery. It trades about 0.06 of its potential returns per unit of risk. Guangzhou Zhujiang Brewery is currently generating about 0.04 per unit of risk. If you would invest 162.00 in Shanghai Metersbonwe FashionAccessories on September 3, 2024 and sell it today you would earn a total of 40.00 from holding Shanghai Metersbonwe FashionAccessories or generate 24.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Metersbonwe FashionAc vs. Guangzhou Zhujiang Brewery
Performance |
| Timeline |
| Shanghai Metersbonwe |
| Guangzhou Zhujiang |
Shanghai Metersbonwe and Guangzhou Zhujiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Metersbonwe and Guangzhou Zhujiang
The main advantage of trading using opposite Shanghai Metersbonwe and Guangzhou Zhujiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Metersbonwe position performs unexpectedly, Guangzhou Zhujiang can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Guangzhou Zhujiang will offset losses from the drop in Guangzhou Zhujiang's long position.| Shanghai Metersbonwe vs. PetroChina Co Ltd | Shanghai Metersbonwe vs. China Mobile Limited | Shanghai Metersbonwe vs. Industrial and Commercial | Shanghai Metersbonwe vs. China Life Insurance |
| Guangzhou Zhujiang vs. Beijing Wantai Biological | Guangzhou Zhujiang vs. Aluminum Corp of | Guangzhou Zhujiang vs. COL Digital Publishing | Guangzhou Zhujiang vs. Shaanxi Meineng Clean |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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